3i Debt Management to build, buy Asia teams

3i Debt Management, the private-debt arm of 3i Group, intends to build or buy teams in Asia to further its business in leveraged loans, says Jeremy Ghose, London-based managing partner and CEO.

A first step to realising the firm’s ambitions in Asia is the hiring of Lisa Johnson as director of investments in Singapore, where 3i Debt Management is applying for securities licenses from regulators.

Johnson joins from New York-based Parker Global, a fund of hedge funds for which she conducted fund raising and marketing. While at Parker, she worked in Shanghai, India and Singapore.

Her role at 3i Debt Management will be to access regional institutional money for the firm’s global strategies in private debt.

Although 3i Debt Management has some existing clients in Japan, it wants to add pension funds, insurance companies, sovereign wealth funds, family offices and private banks from the region’s industrialised economies.

3i Group is now a  $21 billion asset manager listed in London. It got its start as a private-equity investor and branched into infrastructure. In 2011, it moved into private debt (also known as high-yield loans or leveraged loans; it serves as a non-bank lender of floating-rate, senior secured debt to corporations).

Ghose had worked for 23 years at Mizuho Bank, running its London-based non-investment grade lending to non-Japanese companies. He was the first foreigner to serve on Mizuho’s board and established Mizuho Investment Management. In the wake of the 2008 financial crisis, new capital requirements for banks globally prompted Ghose to spin the subsidiary out of Mizuho in early 2011.

“And we ended up with 3i,” he says, noting he and the other managers of the business still retain a 39% ownership of the unit, with 3i owning 61%. The private-debt desk now manages $10 billion, about half of the group’s AUM, with investment centres in London and New York.

“Our ambition is to set up a third centre in Hong Kong or Singapore in the next 12-to-18 months,” Ghose says, predicting that more Asian money will seek to invest in private debt, as traditional fixed income loses its lustre and as more companies seek non-bank financing, particularly in Asia’s faster-growth economies. Non-bank lenders such as 3i Debt Management don’t take depositor money and therefore don’t need to abide by Basel 3 capital constraints.